14 February 2010
if Company forfieted shares wht will be tax treament in hand of company. send me case law to support argument that said receipts is capital receipts there for question of charging tax not applied.
14 February 2010
ABC Ltd. issue share warrant of Rs. 1cr to Mr. X, he required to made paymnet in 2 intallment. 1st paid by him on 1/4/2008 and 2nd due on 01/4/2009 and said is not paid by him there for BOD of ABC ltd forfieted. Now my question is that Rs. .5 cr forfieted by ABC ltd. ,is liable to tax in hands of ABC Ltd.?
Now it’s possible to tell you exact tax law. There is lot of controversy in your case but in Maharashtra in "Income-tax Vs. Deepak Fertilizers and Petrochemicals Corporation Ltd (304ITR AT 367)" case, Mumbai bench of ITAT held that this receipt is capital receipts hence not liable to tax in the hands of company. But you in direct tax code 2009 this forfeiture is chargeable to tax under other source. For you reference follow link for details http://www.taxmann.com/BlogDetails.aspx?bid=20.
No I thought you got satisfactory explanation.
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